IHB News 3-20-2010

Today's featured property is a Woodbridge dreamer hoping to cash out in our re-inflated housing bubble.

Irvine Home Address … 23 EMERALD Irvine, CA 92614

Resale Home Price …… $1,125,000


I'll speak a little louder

I'll even shout

You know that I'm proud

And I can't get the words out

Oh I…

I want to be with you everywhere

Oh I…

I want to be with you everywhere

(Wanna be with you everywhere)

Fleetwood Mac — Everywhere

IHB News

The Irvine Housing Blog saw tremendous reader traffic this week. Four posts were picked up by Patrick.net:

Swiss Central Bank Openly Discourages Mortgage Lending (irvinehousingblog.com)

Why Do Struggling Houseowners Keep Paying Their Mortgages? (irvinehousingblog.com)

Responsible House Owners Are Hurt by Irresponsible Loan Owners (irvinehousingblog.com)

One Defaulting Owner's Free Ride: Three Years and Counting (irvinehousingblog.com)

Calculated Risk also made us a feature of the post: Squatter Stimulus: No Mortgage Payment for Three Years and Counting.

Where does IHBs traffic come from?

The numbers below are from IP addresses Clicky can identify their locations. The raw numbers do not mean much, but you get some idea of the geographic concentration of our readers.

Below is a graphic of the last 500 visitors taken on Friday evening.

Jack Otremba

When I lived in Florida, I became very close friends with Chris and Sharon Otremba. Two years ago, they nearly lost their first child as he was born prematurely at a birth weight of one pound one ounce. He was given a 10% chance of survival.

Over the last two years, I have been following this story closely. It is difficult to imagine what it is like to have your baby undergo multiple life-threatening surgeries and accept a difficult prognosis of future problems. This family knows love like few others.

Jack recently celebrated his second birthday, and he keeps defying the odds. As he continues to grow and develop, his prognosis continues to improve as well. He is poised to live a normal life but with a unique life story.

Link to Video on Jack Otremba.

Matthew John Gilmer

Since I brought up babies, I also want to congratulate my cousin Kathryn and her husband Steve who announced the delivery of their first child on March 16th. My Aunt Pat needs to master emailing photos….

Housing Bubble News from Patrick.net

US House Prices Decline 1.9% in January (calculatedriskblog.com)

6 SoCal Houses Showing the Continued California Housing Correction (doctorhousingbubble.com)

Florida foreclosures create logjam in courts (miamiherald.com)

Phoenix real estate agent pleads guilty in fraud scheme (abc15.com)

KB House ex-CEO tried to keep stock option scheme secret (latimes.com)

Lessons learned from 25 years of forecasting the US economy (emerginvest.com)

Greenspan On The Housing Bubble: Not My Fault (npr.org)

Former Soviet Union to blame for housing bubble: Greenspan (financialpost.com)

Federal Reserve Wants To Eliminate Reserve Requirements Completely? (theeconomiccollapseblog.com)

Unusual Admission that National Debt Will Never Be Paid (thenation.com)

Land tax can reduce other taxes (kansascity.com)

Who is prospering from Prop 13? Commercial landlords. (almanacnews.com)

More houseowners are opting for 'strategic defaults' (latimes.com)

More owners opt to walk and leave mortgages behind (azcentral.com)

Free house for any deliquent CA mortgage owner (patrick.net)

Houseowner associations block guests (orlandosentinel.com)

Alameda land-use ruling could lower cost of a house in CA (sfgate.com)

How to lose $222 million in real estate (lansner.freedomblogging.com)

US mortgage demand tepid even as loan rates sink (reuters.com)

Artificially Low Interest Rates Pump Up Asset Prices (pbs.org)

Fed System Designed to Punish Savers and Encourage Debt (mybudget360.com)

The Fed To Stop Buying Mortgages? (curiouscapitalist.blogs.time.com)

Housing Market Sure to Double-Dip (cnbc.com)

US Mortgage delinquencies at historic highs (moremoney.blogs.money.cnn.com)

Orange County Feb. bankruptcies highest for the decade (jan.freedomblogging.com)

Winners and losers if inflation skyrockets (finance.yahoo.com)

Misconceptions about Money and Velocity (Mish)

Foreclosure starts up nearly 20 percent in California (centralvalleybusinesstimes.com)

Central Valleys Stanislaus County tops for mortgage fraud (modbee.com)

Ex-NY bank president first accused of TARP fraud (reuters.com)

Is it time for Canadians to bottom fish for US real estate? (montrealgazette.com)

Avalanche of Maturing Junk Bonds Looms for Markets (nytimes.com)

Moodys Warns U.S. Debt Could Test Triple-A Rating (nytimes.com)

It's Official: The US Housing Downturn Has Resumed in Earnest (huffingtonpost.com)

New round of foreclosures threatens housing market (washingtonpost.com)

Houseowners take cash for keys to escape debt (msnbc.msn.com)

How Strategic Default Could Save Our Economy (blog.youwalkaway.com)

Something From Nothing (Mish)

Realtors lie about when to buy (mobile.nytimes.com)

The Foreclosure Shadow Market Grows (motherjones.com)

Kern County, CA Property Value Per Sqft Back to 2002 (kerndata.com)

Wall Street: Inside the Collapse (cbsnews.com)

Planet Money Tracks Its Very Own Toxic Asset (npr.org)

Rental investors braving a dismal apartment market (latimes.com)

The Going Gets Tougher For Borrowers (nytimes.com)

FHA challenged on projected risk to taxpayers (washingtonpost.com)

The higher the price range, the worse the market (ocregister.com)

$35 million house assessed at $3.2 million (lagunahomes.freedomblogging.com)

Nicolas Cage: One-Man Real Estate Bubble (nbcnewyork.com)

Irvine Home Address … 23 EMERALD Irvine, CA 92614

Resale Home Price … $1,125,000

Home Purchase Price … $650,000

Home Purchase Date …. 8/13/1993

Net Gain (Loss) ………. $407,500

Percent Change ………. 73.1%

Annual Appreciation … 3.3%

Cost of Ownership


$1,125,000 ………. Asking Price

$225,000 ………. 20% Down Conventional

5.00% …………… Mortgage Interest Rate

$900,000 ………. 30-Year Mortgage

$232,942 ………. Income Requirement

$4,831 ………. Monthly Mortgage Payment

$975 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$94 ………. Homeowners Insurance

$80 ………. Homeowners Association Fees


$5,980 ………. Monthly Cash Outlays

-$1323 ………. Tax Savings (% of Interest and Property Tax)

-$1081 ………. Equity Hidden in Payment

$438 ………. Lost Income to Down Payment (net of taxes)

$141 ………. Maintenance and Replacement Reserves


$4,154 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$11,250 ………. Furnishing and Move In @1%

$11,250 ………. Closing Costs @1%

$9,000 ………… Interest Points @1% of Loan

$225,000 ………. Down Payment


$256,500 ………. Total Cash Costs

$63,600 ………… Emergency Cash Reserves


$320,100 ………. Total Savings Needed

Property Details for 23 EMERALD Irvine, CA 92614


4 Beds

3 full 1 part baths Baths

3,070 sq ft Home size

($366 / sq ft)

5,000 sq ft Lot Size

Year Built 1984

5 Days on Market

MLS Number U10001082

Single Family, Residential Property Type

Woodbridge Community

Tract L2


Turn Key,Remodeled and Expanded with approx.3,070 sf In desirable Woodbridge, Landing II tract. Huge Great Room w/custom Granite Fireplace,New Built in Cabinets,65' Pioneer Elite TV,is open to Kitchen and Large Eating Area Combo,French Doors & Windows.Gourmet Kitchen with Granite Counters,Custom Cabinets,Stainless Oven & Microwave,Meile Dishwasher,Reverse Osmosis. Hardwood flors,Plantation Shutters.Vaulted ceilings in Sunken Living Room.Formal Dining Room.Custom Crown Moldings,Chair Rails & Paint.Lake view Master Suite,dual sided fireplace,2 walk in closets,built in bookshelves. Separate Laundry room,washer&dryer included.Dual AC's,wired for Security System,Tankless Hot water heater,built in garage cabinets.Beautifully hardscaped w/built in BBQ,Putting green in back yard (no house backing up to this).Low tax rate (1.03544%),No Mello Roos!Among Highest Rated Schools in CA.Assoc has 23 pools,2 tennis clubs,2 lakes,bike & walking trails,parks.

I think this is cool. Of course, I get weak around nice built-in bookshelves:

Guys, do you have this much stuff? Perhaps I am too Spartan.

42 thoughts on “IHB News 3-20-2010

  1. MBinRI

    I never cease to be amazed at the inability of Irvine realtors to put together coherent descriptions utilizing proper grammar, spelling and sentence structure. Looking for 6% of 1.125 million and you get the above? If this is what the wonderful Irvine schools produce when fully funded, I fear for the future.

    1. Misstrial

      Not to mention that the sales price does not include the land under home in Irvine.

      IR, can you offer an explanation for why this is the case? Why are asking prices so high considering the fact that the sales price is for the purchase of the home structure only?

      Seems to me that since the land is held under ownership of the Irvine Company, would not Irvine be just one giant fancy mobile home park?

      1. darms

        Is this true? Does the Irvine Corporation keep title to the land there, the land underneath houses like this one?

        If this is indeed the case then Irvine is “one giant fancy immobile home park

        1. IrvineRenter

          No, you own the land under your unit in most instances. The exceptions are stacked flats or other condominium configurations where ownership is of a specified air space.

  2. Freetrader

    WTF? Expecting $1.1 million for this nondescript house on a tiny lot in the middle of a housing meltdown is one thing, but am I the only one who thinks it’s weird that this house actually sold for $650k in 1993 (and had previously been sold in 1990 — another peak year — for $650)? Something seems strange about that…I don’t really believe it.

    1. Walter

      “middle of a housing meltdown”

      We are currently in a meltup. If and when all the Making Homes More Expensive programs disappear, we can get back to the regularly scheduled meltdown.

      1. Freetrader

        If this pile of middle-class crap actually sells for $1.1 million, we can declare the housing bubble fully inflated again. I don’t believe it will — even Zillow values this house at $800something based on their comp calcs.

        1. Planet Reality

          It’s already under contract but they are willing to accept your back up offer for $650K.

          1. Planet Reality

            SUBMIT, it could be your lucky day.

            At least your $800K wishing price is somewhat realistic, even though this has a buyer at or above asking in a few days with multiple offers.

            The most humorous bloggers here are the ones waiting for 1998 prices in Manhattan Beach and Malibu. Dudes and dudettes, put down the crack pipe, it ain’t happening.

          2. Walter

            And if prices come down that far IMO it is because money printing has caused rates to move skyward. Good luck getting a loan if that happens. Although if you have cash, could workout for ya.

          3. wheresthebeef

            Planet Reality, are you a realtor or do you have insider info from the selling agent? That is the only way you can make this statement regarding the selling price.

            I’m not waiting for 1998 prices…that would be ridiculous. But this house selling for near peak bubble price is also ridiculous. You can use your rental parity argument all day long. Whoever buys this now for the listed price will be regretting it in the near future. No I do not have crystal ball and neither do you!

          4. Freetrader

            I own a couple of houses and don’t need another one in Irvine…you are obviously a salesperson trying to talk up the market so you have a vested interest in these bubble prices and not much credibility. As a homeowner, I just want the market to get back to relatively normal. A slightly-above average house in Irvine selling for $1.1 million when the comps are in the 800s is evidence either of some sort of bubble mania (since rates are still at all-time lows) or of delision on the part of the buyer. So, we will see if it actually sells for this price — and since it implies an instant 25% reinflation of the market whether that really means anything other than one person’s incredible foolishness.

  3. Planet Reality

    What do you know? This house is already under contract, back-up offers accepted.

    * Buyers have a big down payment – CHECK
    * Buyers have the income required – CHECK

    How do I know? Lending standards are back to normal, you need to have the income and down payment. Thank the tax payer, as in all of us, for allowing people to buy at rental parity at near bubble prices.

    1. nefron

      Planet, I actually did LOL at your response. I have to agree with you. I don’t see any sign of a slow down in the Irvine market.

      1. Planet Reality

        Nefron, I’m glad. The point of my post are to make you laugh. However when you combine the denial of many blog readers with my post, most here are not laughing.

        Rental parity is here in Irvine, just not the way most expected.
        It’s very generous of the tax payer to support prime area million dollar purchases while 90% of housing markets crash and people not buying in Irvine lose their jobs.

        1. nefron

          I see it that way, too – as usual, the moneyed scumbags get a break.

          I do think the prices that are being paid in Irvine are ridiculous but that’s irrelevant. The fact is, houses continue to sell at these inflated prices. And, I believe that the supply of buyers willing to pay these prices meets or exceeds supply. Who they are, where they get their money, I don’t know.

          I’m holding on to two hopes yet: I think that anyone with that much money expects to live in a nicer house that what money currently brings in Irvine. So, I’m hoping that well-heeled buyers start demanding more for their money when prices don’t rebound (and I don’t think they’ll rebound anytime soon), and prices will fall across the market a bit more.

          Two, I think that the initial listing prices of short sales keep going lower and lower to attract buyers. I hope that is a signal that sales prices will go lower. Any way you look at it, the future is uncertain.

        2. IrvineRenter

          “However when you combine the denial of many blog readers with my post, most here are not laughing.”

          Actually, that made me laugh even harder….

          1. Planet Reality

            I’m glad, as you will certainly have the last laugh as your income continues to rise (as it probably has the past 3 years) and you are able to buy your dream home in Irvine below rental parity.

            I will always bow to your superior wealth building forecasting capabilities. I expect you will stop writing this blog in approximately 18 months as you will be too exhausted from living the dream in Irvine.

    2. fletcher jones

      I’m going to side with Planet Reality’s point of view that prices are holding, well for the >500K market here in Costa Mesa that I’m familiar with anyway. My opinion is skewed though as I just found out that I’m going to be a home owner. The bank approved a short sale I’ve been waiting on for almost year. Sadly, I could turn around and sell it for 40K more than I’m getting it for because I put my offer in last year before this re-inflated market went into affect.

      Irvine Renter – does IHB also do lending? I want to repay you for this amazing site that I’ve been reading everyday for the last 2+ years (or has it been 3+). Also thank you to all the Astute Observers on this site, your comments are appreciated and saved me from buying in over my head in these last years.

      1. Freetrader

        Planet Reality isn’t claiming that prices are holding, he is claiming that prices have suddendly increased by 25%.

        1. Planet Reality

          It’s hilarious how people read my post and then develop their own evil fantasies of what I’m saying. That or reading comprehension is severely lacking.

          Irvine appears to have stabilized. If our government does anything else to support the 90% of markets that have crashed you may see another bubble in Irvine with even lower interest rates. Regardless people with cash and income are buying in Irvine at rental parity with low rates.

          Accept reality.

  4. $8k price drop

    Are home prices going to drop $8k after the promotion ends in April-June ? just curious about what the impact will be when the $8k tax credit is done with.

    1. fletcher jones

      I think there will definitely be less buyers willing to make a home purchase once the $8K is gone (don’t forget about the $6K they are giving away as well). I’m guessing some that are ready to buy will be more willing to ride out the market and wait a year or two to see how the market adjusts after the props are gone. I should know, I was one of them.

      1. ME

        I just don’t get it. I don’t care how much money somone has. Why would you drop a bunch of cash, pay interest , to buy a liabilty? Clearly everyone agrees homes in irvine are expensive.
        Are these loaded cash buyers finding it that hard to rent somehere? Are they really worried about getting evicted or expiring leases?

        1. Walter

          “Are these loaded cash buyers finding it that hard to rent somehere(sic)? Are they really worried about getting evicted or expiring leases?”

          There are two a missing factors here:

          – Many of these people consider renting to be an indicator of inferiority. This way of thinking is common among certain groups.

          – Some people hate moving and want to buy instead of moving, renting, and moving again to buy.

          I am married to someone whose family thinks this way so I know these mindsets exist and there is no reasoning with them. Luckily my wife listens to me over the family so I am not making horrible decisions based on this way of thinking, but I have watched other family members buy in 2005 and now, well the loans will be unlocking later this year…

    1. Misstrial

      Not to disparage, but that’s nothing compared to the methane gas deposits under Sage School and in the vicinity of Newport Coast Dr at San Joaquin Hills Rd. and the 73.

      1. dirk

        You don’t have to tell me what might be in that dump. It blows my mind to see what people pay for homes next to the old dump.

  5. FormerIrvinite

    And from the IHUB traffic map, look at all those Asian large cash buyers viewing the blog. 🙂

  6. Swiller

    The City of Irvine has done a fantastic job over the last 20+ years with the media and propaganda. A sister city in China, as well as Japan. If you think land is over priced here, take a gander at Taiwan or Japan as a whole.

    Lots Chinese are moving here and have been moving here for awhile now. Wasn’t Taiwan supposed to go back under the control of mainland China in 1997? Don’t Chinese officials feel Taiwan WILL BE the same as mainland?

    Irvine is safe, super controlled with police, and there is work within the city to make your commute more like a brisk walk, short run, or quick bike ride. And believe it or not, thee is still some undeveloped land out there in the hills that you can hike, ride your mountain bike, and when the gate is open, ride your motorcycle up to the top of Santiago Peak.

    That’s why Irvine’s housing market performs more like a beach community or beach city.

    1. tonyE

      I’ve lived in Fascist Irvine for 23 years.

      Yes, the cops can be handy but they can also be a royal pain. Like getting tickets for something you “might have done”.

      But the cops are not the issue so much. It’s the HOAs that drive me nuts. Little pockets of fascist juntas led by some little Stalins that practice neighborhood terrorism. I’ve successfully staved off my own HOA, heck I was voted in once, and mine is an older one with pretty minor power. I mean it’s bad enough that the HOA is driven by people who failed Art Appreciation 101 and Architecture for Non Architects 99. Little minds, little brains, lots of time on their hands to plot their own little agendas and plot their nepotist two years plans. Some of the directors have been there for more than 10 yeazs. You want term limits?

      And the real interesting thing, is that for the 23 years I’ve lived in Irvine, mostly consulting, I’ve worked in the City -or even within 10 miles- only for three years! My wife has a 40 mile commute up the 405…

      One of the reasons why we chose Irvine is that it’s location means that I can take jobs all the way from Pasadena to the West Side and San Diego. The location is central -for my business.

      And yes, I don’t like the way Chinese tend to congregate in their own homogeneous little Chinatowns. I would prefer to see them disperse in heterogeneous lay out like the Persians. We got lots of Persians in Irvine but no Little Teheran.

      Other than that I would not compare The Renegade Province (Taiwan) to OC. The land in Taiwan is very rugged -like Japan. In OC you got lots of flat desert just over the Eastern Hills… It’s called Riverside.

        1. Glendale?

          I think it’s Armenians – not Persians – who are a large ethnic group in Glendale. Though, I don’t know if there are Armenian-majority neighborhoods there.

  7. Newbie

    Why did the Irvine Co. put such nice homes (by Irvine standards) right next to the freeway? We looked at this home last week, and the rush of the noise was distracting. I know of one guy on Emerald who told me that it took him two years to get used to that noise. And those two years were annoying for him to say the least.

  8. Chuck

    It looks like I am a little late to this posting, but I thoguht I’d comment since I’ve been following Woodbridge. There have actually been a lot of relatively quick sales of higher priced/larger homes lately, so even thought I do think this house is not worth $1.125 million the price may actually be what the “market” is paying:

    Address Price Status Price/Sq Ft.

    23 Emerald$1.125 In Escrow $366
    8 Earlymorn $999 In Escrow $392
    24 Whsipering Wind $1.165 In escrow $483
    34 Coldbrook $1.399 In escrow $411
    241 Greenmoor $999 In escrow $357
    17 Bloomdale $860 In escrow $375
    4 Buckthorn $1.145 Sold 3/8/2010 $369
    25 Whispering Wind $995 Sold 10/16/2009 $398


Comments are closed.